Silver Price Analysis: XAG/USD sees losses after soft ADP Employment figures, USD steady

The XAG/USD declined to the $24.05 level on Wednesday, trading with mild losses. However, the downward movements may be limited, as negative figures from the US labor market may trigger further dovish bets on the Federal Reserve (Fed), potentially pushing the US yields further down.

The US Unit Labour Costs for Q3 were revised downwards and declined by -1.2%, slightly under the consensus estimate of -0.9%. Additionally, the US Automatic Data Processing Inc. (ADP) reported a lower-than-expected employment change figure for November. These figures clocked in at 103k, compared to the consensus estimate of 130k and the previous figure of 106k, shedding light on a somewhat cooling job creation pace in the labor market. 

However, on Friday, traders will keenly follow several key statistics released by the U.S. Bureau of Labor Statistics, which will provide a more conclusive outlook on the US labor market. The Unemployment rate, Nonfarm Payrolls, and Average Hourly Earnings, reports closely monitored by the Fed, may shape the upcoming decisions of the bank and will likely generate volatility in the US bond market and hence on the metals price. In addition, the sector's tendency may start shaping the calendar on when the Fed will start cutting rates, which will also set the pace of the USD price dynamics. 

Currently, US bond yields are trending downward. The 2-year rate is fixed at 4.59%, while the 5-year and 10-year yields are observed at 4.11% and 4.12%, respectively. This movement may support non-yielding metals since US Treasury bond yields are often seen as their opportunity cost.

XAG/USD levels to watch

The Relative Strength Index (RSI) is exhibiting a negative slope within positive territory while the presence of rising red bars in the Moving Average Convergence Divergence (MACD) further supports the idea that on the daily chart, sellers are gaining traction.

However, the price trades above the 20, 100, and 200-day Simple Moving Averages (SMAs). This configuration is commonly seen as a solid sign of underlying bullish control, suggesting that buyers might maintain dominance over the midterm's trend despite short-term bearish pressure.

Support Levels: $23.90 (20-day SMA), $23.50, $23.30 (100-day SMA).
Resistance Levels: $24.50, $24.70, $25.00.

XAG/USD daily chart